November 2016, Issue 56

Transcription

1 M&A Activity November 2016, Issue 56 Figure 1 Figure 2 - Most Active U.S. Target Industries 3 October 2016 Global +/- From Prior Month U.S. +/- From Prior Month October 2016 Volume (US$B) No. of deals 2,567 (298) 668 (62) Avg. value of deals (US$mil) , Avg. deal multiple x (0.6) 11.0x (1.2) Strategic Transactions Volume (US$B) No. of deals 2,258 (303) 536 (61) Leisure & Recreation Consumer Products Oil & Gas Telecommunications Finance $ $60.12 $46.13 $33.75 $22.15 $200 $400 $600 $800 Last 12 Months Computers & Electronics $ Healthcare $ Avg. value of deals (US$mil) , Avg. deal multiple x (0.6) 11.3x (0.9) Chemicals Utility & Energy $ $ Sponsor-Related Transactions Volume (US$B) No. of deals (1) Avg. value of deals (US$mil) Avg. deal multiple x (0.7) 10.1x (1.7) Oil & Gas $ $200 $400 $600 $800 October 2016 Computers & Electronics 168 Professional Services 75 Crossborder Transactions 2 Healthcare 67 Volume (US$B) No. of deals 610 (81) Avg. value of deals (US$mil) , ,179.1 Avg. deal multiple x (0.3) 10.9x 11.9x (22) (1.2) 0.7 Oil & Gas 50 Finance ,000 2,000 3,000 4,000 5,000 Last 12 Months Computers & Electronics 2,482 Professional Services 1,115 Healthcare 1,060 Finance 521 Oil & Gas ,000 2,000 3,000 4,000 5,000 Figures 1-3 were compiled using data from Dealogic, and are for the broader M&A market, including mergers of any value involving public and/or private entities. Figures 4 and 5 were compiled using data from FactSet MergerMetrics, and are limited to mergers involving public U.S. targets announced during the period indicated and valued at million or higher regardless of whether a definitive merger agreement was reached and filed or withdrawn. All data is as of November 10, 2016 unless otherwise specified. Last 12 Months data is for the period from November 2015 to October 2016 inclusive. Data obtained from Dealogic and FactSet MergerMetrics has not been reviewed for accuracy by Paul, Weiss. 1 Ratio of enterprise value to EBITDA, trailing 12 months. This statistic is calculated using a smaller subset of deals for which this data is available. 2 Global crossborder transactions are those where the acquirer and the target have different nationalities. Nationality is based on where a company has either its headquarters or a majority of its operations. U.S. crossborder transactions are those transactions where the acquirer and the target have different nationalities and either the acquirer ( ) or the target ( ) has a U.S. nationality. 3 Industries categories are determined and named by Dealogic PAUL, WEISS, RIFKIND, WHARTON & GARRISON LLP 1

2 M&A Activity (Continued) Figure 3 - Top 5 Countries of Origin or Destination for U.S. Crossborder Transactions U.S. Crossborder Transactions for October 2016 U.S. Crossborder Transactions for the Last 12 Months $60.95 Canada $ China $21.99 Germany $96.75 Japan $8.67 $92.05 Canada $4.61 China $61.49 India.63 $50 $150 $200 $250 Canada 28 France $30.93 $50 $150 $200 $250 Canada 420 Japan China 12 Japan China 160 Australia U.S. Crossborder Transactions for October 2016 Germany U.S. Crossborder Transactions for the Last 12 Months Netherlands $48.14 $72.22 $4.03 Netherlands $50.63 Germany $2.32 Canada $14.05 Denmark $1.68 Sweden $12.00 Canada $1.61 France $11.33 $30 $60 $90 $120 $150 $30 $60 $90 $120 $150 Canada and 4 Germany Australia Canada Australia Germany India France Each of Canada and the was the country of destination for 23 transactions in October PAUL, WEISS, RIFKIND, WHARTON & GARRISON LLP 2

3 M&A Activity (Continued) Figure 4 - Average Value of Announced U.S. Public Mergers (in US$mil) $40000 $37,218.2 $35000 $30000 $25000 $20000 $18,655.8 $16,440.5 $ $5000 $13,826.2 $5,754.0 $3,25 $3,412.3 $6,977.5 $5,777.4 $2,361.6 $7,264.3 $3,647.0 $3,184.2 $8,918.3 $4,301.0 $12,156.8 $3,280.8 $7,615.3 $3,044.0 $12,629.9 $8,100.5 $5,513.8 $2,129.4 $2,737.3 Average Value of Five Largest U.S. Public Mergers Average Value of All U.S. Public Mergers Figure 5 - Five Largest U.S. Public Mergers October 2016 Equity Value (US$B) Time Warner Inc. ~ AT&T Inc. (October 22, 2016) $83.07 Reynolds American Inc. ~ British American Tobacco Plc (October 21, 2016) $46.55 Level 3 Communications, Inc. ~ CenturyLink, Inc. (October 31, 2016) $25.16 Baker Hughes, Inc. ~ General Electric Co. (October 31, 2016) $25.01 BE Aerospace, Inc. ~ Rockwell Collins, Inc. $6.30 (October 23, 2016) $20 $40 $60 $80 Last 12 Months Equity Value (US$B) Time Warner Inc. ~ AT&T Inc. (October 22, 2016) $83.07 E. I. du Pont de Nemours and Company ~ The Dow Chemical Company (December 11, 2015) Monsanto Company ~ Bayer AG (May 18, 2016) Reynolds American Inc. ~ British American Tobacco Plc (October 21, 2016) $61.55 $56.04 $46.55 Norfolk Southern Corporation ~ Canadian Pacific Railway Ltd. (November 17, 2015) (Offer withdrawn April 11, 2016) $30.71 $20 $40 $60 $80 PAUL, WEISS, RIFKIND, WHARTON & GARRISON LLP 3

4 M&A Terms Figure 6 - Average Break Fees as % of Equity Value 5 12% (US$mil) $12000 $11,089.9 $6, % $4, $ $2,367.1 $3,504.0 $2,361.6 $3,074.4 $3,033.1 $2,749.9 $3,044.0 $2,245.4 $2,888.9 Avg. Target Break Fee as % of Equity Value Average Value of All U.S. Public Mergers with Definitive Agreements Avg. Reverse Break Fee as % of Equity Value Figure 7 - Average Break Fees as % of Equity Value October 2016 Last 12 Months Target Break Fee for All Mergers October 2016 Last 12 Months Reverse Break Fee for All Mergers Reverse Break Fee for Mergers Involving Financial Buyers 6 Reverse Break Fee for Mergers Involving Strategic Buyers Figures 6-12 were compiled using data from FactSet MergerMetrics, and are limited to select mergers involving public U.S. targets announced during the period indicated, valued at million or higher and for which a definitive merger agreement was reached and filed (unless otherwise indicated). Data obtained from FactSet MergerMetrics has not been reviewed for accuracy by Paul, Weiss. Figure 8 - U.S. Public Merger Go-Shop Provisions October 2016 Last 12 Months % of Mergers with Go-Shops % of Mergers Involving Financial Buyers with Go-Shops 7 % of Mergers Involving Strategic Buyers with Go-Shops Avg. Go-Shop Window (in Days) for All Mergers with Go-Shops 8 Avg. Go-Shop Window (in Days) for Mergers Involving Financial Buyers with Go-Shops 9 Avg. Go-Shop Window (in Days) for Mergers Involving Strategic Buyers with Go-Shops N/A Based on the highest target break fees and reverse break fees payable in a particular deal. 6 Two transactions in October 2016 involving a financial buyer had a reverse break fee. 7 Two transactions in October 2016 involved a financial buyer. 8 Two transactions in October 2016 had a go-shop provision. 9 Two transactions in October 2016 involving a financial buyer had a go-shop provision. 10 No transaction in October 2016 involving a strategic buyer had a go-shop provision. PAUL, WEISS, RIFKIND, WHARTON & GARRISON LLP 4

5 M&A Terms (Continued) Figure 9 - Form of Consideration as % of U.S. Public Mergers % Figure 10 - % of Partial and All Stock Deals that Have a Fixed Exchange Ratio October Last 12 Months % 28.6% Figure 11 - Tender Offers as % of U.S. Public Mergers 21.4% October % 15.0% Cash Only Stock Only Cash & Stock Only Choice (Cash Election) Other October Last 12 Months 22.8 Figure 12 - Hostile/Unsolicited Offers as % of U.S. Public Mergers 12 October Last 12 Months % 15.5% Last 12 Months 11 Due to rounding, percentages may not add up to 100%. 12 This data includes both announced transactions for which a definitive merger agreement was reached and filed and those for which a definitive merger agreement was never reached and filed (including withdrawn transactions). Paul, Weiss is a leading law firm serving the largest publicly and privately held corporations and financial institutions in the United States and throughout the world. Our firm is widely recognized for achieving an unparalleled record of success for our clients, both in their bet-the-company litigations and their most critical strategic transactions. We are keenly aware of the extraordinary challenges and opportunities facing national and global economies and are committed to serving our clients short- and long-term goals. Our Mergers & Acquisitions Practice The Paul, Weiss M&A Group consists of more than 30 partners and over 100 counsel and associates based in New York, Washington, Wilmington, London, Toronto, Tokyo, Hong Kong and Beijing. The firm s Corporate Department consists of more than 60 partners and over 200 counsel and associates. Our M&A Group is among the most experienced and active in the world. We represent publicly traded and privately held companies, leading private equity firms, financial advisors, and other financial institutions and investors in their most important mergers and acquisitions, joint ventures and other strategic transactions. Our expertise advising corporations and private investors in a broad range of sophisticated transactions enables us to identify new opportunities for our clients to realize value. We have particular experience in guiding clients as they engage in proxy battles, company-altering and market consolidating transactions or capital markets transactions. Recent highlights include: advising Time Warner Cable in its $79 billion merger with Charter Communications; representing Qualcomm in its approximately $47 billion pending acquisition of NXP Semiconductors; advising Agrium in its $36 billion pending merger of equals with Potash Corp. of Saskatchewan; representing funds affiliated with Apollo Global Management and Protection 1 in their $15 billion acquisition of ADT Corporation; advising Alere in its $8 billion pending acquisition by Abbott Laboratories; representing EXOR in its successful $7 billion unsolicited cash bid for Re; advising Jeffrey Katzenberg in DreamWorks Animation s $4 billion acquisition by Comcast; and representing the Board of Directors of Xerox in its plan to separate the company into two public companies. PAUL, WEISS, RIFKIND, WHARTON & GARRISON LLP 5

6 This publication is not intended to provide legal advice, and no legal or business decisions should be based on its content. Questions concerning issues addressed in this memorandum should be directed to: Matthew W. Abbott New York Scott A. Barshay New York Office Angelo Bonvino New York Ariel J. Deckelbaum New York Jeffrey D. Marell New York Counsel Frances F. Mi, associates Ryan D. Blicher, David S. Lightstone, Edy Glozman and N. Arie Abramov and law clerks Yae Na Woo, David Okada and Michael Wysolmerski contributed to this publication. Our M&A s Matthew W. Abbott Brian P. Finnegan John E. Lange John M. Scott Edward T. Ackerman Adam M. Givertz Xiaoyu Greg Liu Judie Ng Shortell Scott A. Barshay Robert D. Goldbaum Jeffrey D. Marell Tarun M. Stewart Angelo Bonvino Neil Goldman Toby S. Myerson Steven J. Williams Jeanette K. Chan Bruce A. Gutenplan Kelley D. Parker Betty Yap Ellen N. Ching Justin G. Hamill Carl L. Reisner Kaye N. Yoshino Ariel J. Deckelbaum David K. Lakhdhir Kenneth M. Schneider Tong Yu Ross A. Fieldston Stephen P. Lamb Robert B. Schumer Taurie M. Zeitzer NEW YORK BEIJING HONG KONG LONDON TOKYO TORONTO WASHINGTON, D.C. WILMINGTON PAUL, WEISS, RIFKIND, WHARTON & GARRISON LLP PAULWEISS.COM Paul, Weiss, Rifkind, Wharton & Garrison LLP. In some jurisdictions, this publication August be considered attorney advertising. Past representations are no guarantee of future outcomes.

7 M&A Activity 12-Month Trends A N N E X Figure 1A - U.S. Deal Volume (US$B) $350 $ $300 $250 $200 $150 $50 $ $ $ $95.06 $99.96 $ $64.42 $77.47 $29.75 $15.24 $17.60 $35.54 $ $71.86 $83.54 $51.85 $20.01 $18.87 $ $ $ $96.54 $49.03 $49.95 $ $ $89.89 $71.68 $38.63 $37.73 $ $ $17.22 $ $29.79 Strategic Sponsor Figure 2A - Global Deal Volume (US$B) $600 $ $500 $400 $ $ $300 $200 $ $ $59.87 $47.95 $ $ $35.33 $ $ $ $ $ $ $64.22 $62.21 $46.25 $ $ $ $ $77.66 $78.50 $ $ $67.43 $ $ $ $ $ $52.49 $45.73 $69.62 Strategic Sponsor PAUL, WEISS, RIFKIND, WHARTON & GARRISON LLP A-7

8 A N N E X Figure 3A - U.S. Number of Deals 1, Strategic Sponsor Figure 4A - Global Number of Deals 3,500 3,000 2,500 3,009 2,641 3,107 2,747 3,346 2,950 3,223 2,847 3,301 2,973 3,159 2,790 3,079 2,719 3,264 2,888 3,028 2,975 2,689 2,672 2,865 2,561 2,567 2,258 2,000 1,500 1, Strategic Sponsor PAUL, WEISS, RIFKIND, WHARTON & GARRISON LLP A-8

9 A N N E X Figure 5A - U.S. Crossborder Transactions 200 $80 $60 $40 $ $37.26 $40.03 $27.67 $29.45 $24.80 $16.86 $83.56 $21.61 $29.53 $26.81 $68.22 $ Figure 6A - U.S. Crossborder Transactions 200 $80 $60 $40 $ $35.24 $13.37 $8.03 $24.71 $16.14 $8.96 $15.55 $8.18 $10.47 $10.16 $19.87 $ Figure 7A - Global Crossborder Transactions $250 $200 $ $50 $ $ $64.91 $ $87.31 $61.90 $131 $79.27 $ $62.25 $ $ PAUL, WEISS, RIFKIND, WHARTON & GARRISON LLP A-9